How Bitcoin-Backed Lending Works
What Bitcoin-backed lending is, how the mechanics protect both sides, and how Reserve is built. No income checks. No credit scores. Just Bitcoin.
The Loan Lifecycle
Start a Conversation
Bitcoin-backed lending begins with a conversation, not a form. Tell us about your situation - no commitment, no account required - and we'll explain how the category works and whether it fits.
Verification
Like any serious lender, identity and eligibility checks come first. We'll give you a clear picture of what's needed and how long it takes during your inquiry.
Segregated Collateral
In this model, Bitcoin collateral sits in a dedicated, segregated custody address - held separately from all other assets, never lent out or leveraged. The borrower retains beneficial ownership throughout.
Funding
Once collateral is confirmed, cash is advanced against it. The loan is secured by the collateral alone - no income checks, no credit scoring.
Live Monitoring
The position is monitored continuously against the collateral's market value, with clear notification thresholds agreed up front so there are never surprises.
Repay & Reclaim
When the facility is settled, the Bitcoin is released in full and the loan is closed. The position you believed in is still yours.
Collateral Management
Your Bitcoin is protected by clear, transparent rules. No surprises.
Bitcoin is volatile. We've designed our loan structure to absorb significant price drops while giving you every opportunity to protect your position.
Origination - substantial headroom. Loans in this category are advanced at a conservative loan-to-value, meaning the collateral is worth a multiple of the loan. The price has to fall a long way before anything happens at all.
Margin call - a structured cure window. If the collateral's value falls past an agreed threshold, the borrower is notified and given a defined window to restore the position - by adding collateral or paying down principal. The exact thresholds and windows are set out in the loan agreement before anything is drawn.
Liquidation - a last resort, by design. Only if no cure is made does collateral get sold - and in a well-designed structure, only enough to restore the position to health. A partial workout, not a forced wind-down. Remaining collateral stays pledged to the borrower.
A borrower always has the option to add collateral or repay early to protect a position. Specific thresholds, cure windows, and terms are set out in the loan agreement and shared with qualified applicants during inquiry.
Your Options, Compared
| Sell Your Bitcoin | Bank Loan | Reserve | |
|---|---|---|---|
| Keep your BTC | No - permanently exit your position | N/A - banks don't accept BTC | Yes - full exposure maintained |
| Tax impact | Capital gains tax triggered (up to 24% in the UK) | None | Borrowing does not itself trigger a disposal for UK CGT purposes* |
| Speed | Instant (but irreversible) | Weeks to months | Days, not months |
| Income required | No | Yes - proof of income, credit check | No - collateral-based only |
| Future upside | Lost permanently | N/A | Fully retained |
| Cost | CGT on your gains, plus permanent exit | Variable, if approved | Fixed, disclosed in full before commitment |
*Tax treatment depends on your individual circumstances and may change. Reserve does not provide tax advice. Speak to your adviser.